"We hold that the Army's regulations violate the constitutional guarantee of equal protection of the laws because they discriminate against persons of homosexual orientation . . . and because the regulations are not necessary to promote a legitimate compelling governmental interest," said a three-judge panel of the U.S. 9th Circuit Court of Appeals.

The 2-1 ruling, written by Judge William Norris, reversed a lower court ruling that had upheld a 1982 decision by the Army to bar the re-enlistment of Sgt. Perry J. Watkins, 39, of Tacoma, Wash., because of his homosexuality. Watkins, who received exemplary performance ratings throughout his 14-year military career, had admitted his sexual preference before he first enlisted in August, 1967, and occasionally performed as a female impersonator with the permission of his superiors.

Activists' Viewpoint

The ruling was hailed by advocates of gay rights because, if upheld, it would grant the same special legal protection to homosexuals that the U.S. Supreme Court has conferred on those who are discriminated against because of their race or nationality. That protection could extend far beyond military service to government discrimination in employment and housing, some attorneys suggested.

The appellate ruling does not prohibit the Army or other branches of the military from forbidding certain types of sexual conduct, such as sodomy or oral copulation, as long as the prohibition applies to both heterosexuals and homosexuals.

"This is the most important judicial victory for gay rights ever issued by a court in the United States," said Thomas Stoddard, executive director of the Lambda Legal Defense and Education Fund, a gay rights organization.

Wide Application Seen

"This is a major victory," added Jeff Levi, executive director of the National Gay and Lesbian Task Force.

"I see (the decision) applying to all branches of government--state, federal and local," said James Lobsenz, who represented Watkins in cooperation with the American Civil Liberties Union.

The appellate ruling, Lobsenz added, "says that any government action that distinguishes between the way that government treats heterosexuals and homosexuals is presumptively invalid in the same way that laws that distinguish between the treatment of blacks and whites are invalid. It puts it on the same place as race discrimination," Lobsenz added.

The Army has the right to seek a rehearing of the decision by the entire 9th Circuit and by the U.S. Supreme Court.

An Army spokesman at the Pentagon said the service has not had a chance to completely review the decision and therefore would have no immediate comment.

Specifically, the court addressed two sets of Army regulations promulgated in 1981. One barred the re-enlistment of any soldier or officer "who desires bodily contact between persons of the same sex . . . with the intent to obtain or give sexual gratification." A second set of regulations required the discharge of Army personnel who met the same criteria.

Earlier Regulations

The 1981 regulations were refinements of earlier and less specific regulations that barred homosexuals from service, the Army spokesman, Lt. Col. Greg Rixon, said. In 1984, the Army again changed the wording of the regulations to apply to anyone who "engages in, desires to engage in or intends to engage in homosexual acts."

Rixon said he did not know why Watkins was allowed to enlist in 1967 and subsequently re-enlist when the Army had a specific policy of not accepting homosexual recruits.

Kathleen Taylor, executive director of the Washington state chapter of the ACLU, said of the appellate ruling, "We would assume that it bars discrimination by the Army on the basis of sexual orientation, period."

The Navy and Air Force have similarly worded regulations, and would almost certainly be bound by the 9th Circuit decision if it survives review, she added.

In his opinion, Judge Norris noted that the Army regulations do not require the discharge of men or women found to have engaged in homosexual acts "solely from immaturity, curiosity, or intoxication."

Judge's Reasoning

Norris wrote: "If a straight soldier and a gay soldier of the same sex engage in homosexual acts because they are drunk, immature or curious, the straight soldier may remain in the Army while the gay soldier is automatically terminated.

"In short, the regulations do not penalize soldiers for engaging in homosexual acts; they penalize soldiers who have engaged in homosexual acts only when the Army decides that those soldiers are actually gay."

That, the judge said, is a violation of the Constitution's requirement for equal protection under the law.